Caught between a rock and a hard place...
is where BGMO and its directors could find themselves.
Consider this for a moment.
Let us assume that through the SEC investigation that they determine that there was anything from insider trading or the intent to deceive, then, our Company and its directors could find themselves wearing bright orange jumpsuits.
Now, let us assume that the SEC investigation finds out that the money is real. The financial report for the partial year (Sept 2012) shows two major taxable events.
The first is at the corporate level. The IRS does not like taxpayers taking their time to pay their fair share. It would appear to me that they would owe taxes plus interest and penalties from the reported part of 2012, the unreported part for the balance of the year as well as for this part of 2013. The IRS's response is to pay up now!
The second is at the personal level. Again the IRS does not like late filers. HH and SP have indicated and attested to the fact that they each made $ 40 million during the first part of 2012. The IRS does not concern itself if you have received the cash as it was not a salary.
Now, what if the IRS was doing an investigation on the reported profits from say 2009. They could take the approach of levying the taxes, interest and penalties from 2009 until the entries were reversed. However, would they reverse out the penalties and interest? I don't know.
Based on the stories circulating on this site, it is more than probable that HH received warrants in BGMO and sold them for a profit. Based on previous behaviour, it is also likely that the gain reported on the exercising of the warrants was not reported. What would be the impact on BGMO if its President was caught for tax avoidance or evasion?
One thing that we should remember.
No court ever convicted Al Capone for murder or racketeering.
He was finally caught as a tax cheat!
